The Silicon Valley Backlash is Heating Up

Hi all, it’s Eric. Big tech is falling out of political
favor. This week, BuzzFeed's Ben Smith convincingly argued that the tides are
turning against Google, Facebook and Amazon. The article, “There's Blood in the
Water in Silicon Valley,” is worth a read.
As Ben points out, Steve Bannon is leading the charge from the right,
calling for Google and Facebook to be regulated like public utilities. Bernie
Sanders is helping to push the anti-tech charge from the left. Populists on
both wings want to kneecap big tech.

Unfortunately (or fortunately) for the technology giants,
there isn't a coherent, unified critique of their behavior. The grievances come
in many forms and from many camps. They include:

·Simmering 99 percenters angry over tech's
growing power

·Mounting antitrust concerns

·Animus from ad-dependent media companies

·Bias charges from right-wingers without a seat
at the table in Silicon Valley

·Complaints, especially from Democrats, about
Russian interference in the election, particularly via social media

This week two major problems broke open for Facebook.
ProPublica revealed that the social-media company took people's money in
exchange for helping them run anti-Semitic ads:

Until this week, when we asked Facebook about it, the
world’s largest social network enabled advertisers to direct their pitches to
the news feeds of almost 2,300 people who expressed interest in the topics of
“Jew hater,” “How to burn jews,” or, “History of ‘why jews ruin the world.’”

At the same time, Facebook is being implicated in the
Russian effort to attack the election. Last week, we learned that fake accounts
that were probably run from Russia spent about $100,000 on ads to drum up
political divisions in the U.S. This week, the situation worsened. “Mueller
Probe Has ‘Red-Hot’ Focus on Social Media, Officials Say.” That headline from
Bloomberg News on Thursday can't be reassuring to the policy folks over at
Facebook. The social-media giant of more than 2 billion users is at the center
of the special counsel's investigation.

If you want a taste for the political reaction, here's
Josh Marshall writing in Talking Points Memo:

I think the political juice of the Russia story is pushing
Facebook toward a bruising encounter with the reality that it’s not God, not a
government, not the law. It’s just a website. It can’t happen soon enough.

That's just Facebook. On Thursday, former Google
employees filed a class action against the company, arguing that it pays women
less for similar work.

Google probably faces the biggest antitrust backlash. The
search provider lost a $2.7 billion ruling from the European Union in June.
Yelp, which has been on a multiyear crusade against Google's behavior, feels
like its messaging is finally breaking through. Yelp's policy chief Luther Lowe
told Ben Smith, “Antitrust is back, baby.”

Alphabet, Google’s parent, is looking to invest $1
billion in Lyft. Although Alphabet is also an Uber shareholder through its GV
venture arm, an investment would signal strong support for its competitor.
Alphabet’s self-driving car business, Waymo, has been embroiled in an ugly
lawsuit with Uber. Lyft has gained market share this year as Uber has bent
under a series of self-inflicted scandals.

Jack Ma is ambitious, to say the least: now he’s talking
about taking Alibaba deeper into brick-and-mortar retail. The founder of the
Chinese e-commerce giant spoke in an interview about his ambitions of breaking
into shopping malls, moving away from its asset-light approach to grab a bigger
share of global trade.

Apple may seal its biggest deal yet in an unlikely place
with a not-so-flashy company: Toshiba. Apple is in talks to invest about $3
billion in Toshiba’s memory chips business as part of a consortium led by Bain
Capital, people familiar with the matter said. The deal could give the iPhone
maker an equity stake of about 16 percent.

China’s bitcoin enthusiasts are ditching WeChat. The
country’s crackdown on bitcoin and the messaging platform is sending them to
Telegram and other secure messaging apps to communicate.

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